Consumers are becoming fed up with drug costs

Posted Wednesday, September 9, 2015, at 12:14 AM

Late this summer the Food and Drug Administration approved two new drugs for lowering cholesterol. Repatha and Praluent are aimed at patients with very high cholesterol levels who haven't been helped by commonly used statins or other therapies. The new drugs' debut was marked by the usual hype touting the wonders of the latest pharmaceuticals.

"I can tell you there is a lot of hope on the part of our patients," said Dr. Seth Martin, associate director of the lipid clinic at Johns Hopkins. "There is such a high need for these medications."

This new drug launch, though, was different from others I've seen. This time there was serious concern from insurers, state Medicaid programs and others about the price tag for both drugs, which are expected to cost between $14,000 and $15,000 per year. Patients take an injection of the drug every two weeks at a price of around $560 for each shot. Multiply that by the millions who will take the drug, and that's a good chunk of change by any standard.

"The approval of Repatha is another example of a breakthrough medication with too high a price tag," says John Rother who heads the National Coalition on Health Care and its Campaign for Sustainable Rx Pricing.

Rother's campaign has had some success raising public awareness about the high cost of medicines spurred on no doubt by the rising prices for generic drugs and the increasingly common practice among insurers of shifting the cost of expensive specialty drugs (those for complex, chronic, and costly conditions) to patients themselves by requiring them to pay high deductibles and high coinsurance. Coinsurance for specialty drugs can mean paying between 30 and 50 percent of a drug's price out of pocket.

No wonder consumers are asking, "What's going on here?"

The latest Kaiser Health Tracking Poll offered some surprising findings. Seventy-two percent of Americans think drug costs are unreasonable. About the same percentage said drug companies put profits before people. While about three-quarters of those questioned said paying for their medicines was easy, one quarter did not, especially those with low incomes and those who use a lot of drugs.

The poll findings are significant considering that historically Americans have been in love with new drugs and medical devices and have been willing to pay almost any price for them.

That love affair may be cooling as the cost implications of Sovaldi, the $84,000 drug to treat hepatitis C, and the ever-increasing price of medicines to treat common diseases like diabetes begin to sink in. This summer the California Association of Health Plans estimated that even though hepatitis C drugs are very effective, to treat just 10 percent of the 175,000 patients who have coverage from insurance programs run by the state---such as Medicaid and the state employees plan---would cost California $1 to $2 billion for one year.

The cost for treating diabetes is zooming up too. In its latest drug trend report Express Scripts, the pharmacy benefit manager, found that for the fourth year in a row spending on all diabetes drugs was higher per person per year than it was for any other class of traditional drugs. The reason: Some people take three or four different diabetes medications, and more people are taking them.

What's the solution? While the answer up until now has been "let the market prevail," the Kaiser poll discovered that large numbers of Americans both Democrats and Republicans favored greater transparency in how drug makers set their prices.

A handful of states are calling for drug makers to disclose the costs of manufacturing and developing their pharmaceuticals for drugs that cost more than $10,000 for a course of treatment. Some states are trying to limit what consumers pay by capping the amount insurers can charge them for coinsurance and copayments, flat dollar amounts. The drug industry opposes these efforts.

Perhaps the more important question is whether these state initiatives will make drugs cheaper. Many experts including Rother don't think so. "The underlying cause is the incredibly steep prices that are unsustainable regardless of how we handle the insurance," he says. "The problem is not who pays but that drugs cost too much."

The Kaiser poll found that more than 80 percent of Americans want the government to negotiate prices of drugs for Medicare, something the law forbids thanks to lobbying pressure from pharmaceutical companies. Negotiations are precisely what drug makers fear.

But if more drugs with $84,000 price tags show up, something has to give. Will the public make high drug prices a campaign issue?